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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (19941)	7/22/2003 12:00:03 AM
From: chowder	Read Replies (1) \| Respond to of 23153

Gottfried, Of course those returns were during the bubble. How many of us came close to them? I'm not focusing on their time frame for those returns. I don't expect we'll be able to duplicate them. What I do expect to duplicate is the principles and tactics used to outperform not only the market, but our peers as well. This month's copy of Stocks & Commodities Magazine came in the mail Saturday. Lo and behold, they had an interview with a trader who outperformed those in the book. The man's name is Dan Zanger and he achieved a 164,000% return in 18 months. He turned $11,000 into $18 million over an 18 month period. It's a record! He doesn't use technical indicators at all. The only thing he uses is chart patterns, price and volume. That's it. Of course, he's not up 164,000% during the most recent 18 months but, he is up 60% over the last six months. Again, tremendous results given the condition of the market during the time these results were being obtained. What hasn't changed is his methods and strategies for investing. That's the beauty of his system. When most people are having a difficult time in a bear market, these guys are getting the results we had in a bull market. In a bull market, they are getting record returns! I have a list of stocks I went back and researched, that met the criteria these guys use in the selection of their stock picks. One stock is up over 700% since January when the buy signal came in. There are 14 other stocks with returns already in excess of 100%. In just six months! And, this is the most recent six months. A successful trading system should work in bull or bear markets. The percentages won't be the same but, being able to outproduce the market and most investors by a considerable amount should be. Everything is relative. I don't expect to get a 1000% rate of return but, I now can conceive raising my results from 30% per year to 60%. I now can conceive not having a negative return in any year. A strong stock is a strong stock is a strong stock. Later in the book, one of the traders will talk about the fear people have in buying stocks that are breaking out to new highs. What makes them an option is that's where the fund managers invest. Institutional investors are the ones that will drive those prices higher. In the world of supply and demand, the fund managers provide an awful lot of liquidity and demand. Hell, if a stock is going to increase in value 700% in six months, at what point during it's rise did it become too expensive to buy? 200%? 400%? 600%? The only way to have tremendous returns is to have stock prices become expensive. They best way to have stock prices become expensive is to have a stock with strong earnings and revenue growth. Smart money will pay up for fundamentally strong companies. It's human nature! It's part of the psychology of the market. Those who think small, buy small. Those who think big, buy big. That's why some automobiles cost 13 grand and others 60 grand. Value is in the eye of the buyer and smart money will buy expensive stocks if the fundamentals are very strong, bull market or bear. dabum